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Higher rates for longer; buy these stocks anyway

Sep 22, 2022

Good morning!

‍The Fed hiked rates again and said that it may continue to do so until they hit 4.6%. Stocks, of course, didn’t much like that.

I spent some time talking with the fantastic Liz Claman and Stephen “Sarge” Guilfoyle about that as the session wound down. (Watch)

Here’s my playbook.

The morning after

Rates are now the highest they’ve been in 14 years and, at 3-3.25%, the Fed Fund’s Rate has a long way to go to get to 4.6%. (Read)

Low-beta high dividend stocks will be your best friend as long as the shenanigans continue. It’s not a coincidence that several of the recommendations in One Bar Ahead™ held up in a sea of red. One of ‘em even hit new 52-week highs! – Urah! Upgrade to One Bar Ahead™

Last flight outta Russia

Putin has called up 300,000 reservists for duty as his botched Ukrainian invasion rages. Prices for one-way tickets out went sky high as did searches for “how to break your arm at home”, a move that would render potential conscripts unfit. (Read)

Putin has also raised the spectre of using nukes; many think he’s bluffing but I am not one of ‘em.

How to play the situation: The markets will melt faster than an ice cube on a hot Texas summer afternoon if he does. Inverse funds are key here and I hope you have positions in the right choices, especially those I’ve recommended since last January. Put options on the SPX/SPY would be a good choice. So, too, would UVXY call options.

Black markets aren’t just for 3rd world countries anymore

Scammers are buying high-$ alcohol and refilling the bottles with cheaper liquor or even water before pawning ‘em off via auction sites or internet marketplaces at discount pricing. (Read)

It’s not clear what the impact will be on stocks like Constellation or Diageo but I’m watching the situation closely. There may be an opportunity at hand.

Complaints against El Zucko mount

The Center for Renewing America (CRA) has filed two complaints against Zuck and his wife Priscilla Chan and the Center for Tech and Civic Life (CTCL), Center for Election Innovation and Research (CEIR) and National Vote at Home Institute (NVAHI) — Thursday morning with the Internal Revenue Service (IRS) according to FOX Business. (Read)

No surprise here. Zuckerberg hired former Obama campaign manager David Plouffe to allegedly funnel hundreds of millions of dollars – grants by any other name to groups in swing states that could “throw” the elections.

I continue to believe the stock will be sub-$100 before the dust settles. Putskies, bearish spreads and more could pay off nicely.

Costco’s earnings more important than JPow

What’s happening. Retail behemoth Costco reports after the bell today. The stock has held up against inflation, supply chain problems and more. However, even a whiff of those things in the company’s guidance could be problematic for the broader markets, not necessarily the stock.

Why you should care. I think there could be a serious “beat” in the works, especially with all the buzz around membership price hikes that may be in the works. (Read)

Any dip will be an opportunity, which is why you want to be ready.

BTW, I recommended COST to the One Bar Ahead™ Family last August and the stock has performed as expected. No – scratch that – better than expected, actually. COST has outperformed the S&P 500 by 27% since.

While we’re on the subject, another inflation-resistant favorite of mine just smashed earnings as well. That stock’s also got an ultra-low beta and could be just what your portfolio needs if you’re in search of a smoother ride. Get the stock

Bottom Line

Bear markets are just like bull markets if you treat 'em right. There are pigs to be short/avoid or buy puts most of the time. And a handful of bullish stocks to own anyway.

You know what to do!

Now let’s get out there and make it a GREAT day!


PS: Trillions of dollars have been vaporized this year as markets have fallen.

Do you have a plan?

Want one?

Please join me at the Orlando MoneyShow Oct 29th – Nov 1 where I will be sharing my thoughts on how to prepare for 2023, teaching a few breakout sessions and more. Sign up here to receive a discount.

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